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News Analysis

Fortnightly Magazine - January 1 1999

million that it has already spent.

Timetables Vary

According to the SEC release, a company is to disclose some form of timetable for each phase of its plan and where it is on that timetable.

Virginia Electric & Power Co., which had spent only $7.8 million of an estimated $40 million to $50 million, reported in its third-quarter 10-Q that approximately 83 percent of its systems identified as critical were "year 2000-ready" by Sept. 30. "We anticipate that 99 percent of such systems will be year 2000-ready in July 1999 with 100-percent completion scheduled for October 1999," the report reads.

Detroit Edison says that the conversion of its embedded technology-crucial devices used in the operation of equipment, machinery and the plant itself-was approximately 61 percent complete by the end of the third quarter, with the remainder of the work to be completed by June 1, 1999.

By contrast, the New York Public Service Commission recently set July 1, 1999 as the target date for Y2K readiness for all utility mission-critical systems, including contingency plans. It required any company unable to meet that date to file an explanation no later than Dec. 31. Case 93-M-1432, Oct. 30 (N.Y.P.S.C.).

Third-party Risk Cited

The effect that the readiness of third-party vendors and service suppliers will have on utilities is another concern. Heeding the SEC's advice to report on this matter, Houston Industries states that it is seeking written assurances from such third parties as to their state of readiness. One of the components of Southern California Edison's Y2K readiness program is to identify and assess vendor products and business partners for their own Y2K readiness.

Some companies state that they are developing contingency plans not only in the event that their own Y2K adjustments fail, but also in case third parties are not Y2K ready-something over which they have less control. As Unicom Corp., which files jointly with Commonwealth Edison, warns, "The failure of such parties to resolve year 2000 issues could result in significant disruptions."

Carl J. Levesque is an editorial assistant with Public Utilities Fortnightly.

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